Quick Stats

Quick Stats

    You are here

    Volume Slows, While Profits Grow for A-B

    Except in international business, where profit will be down due to poor U.K. revenue.

    NEW YORK -- The sales and earnings results for Anheuser-Busch (A-B) in the first nine months of 2006 rebounded compared to the same period in 2005, and the outlook for the year is positive, the company reported at a presentation yesterday.

    "While volume growth for Anheuser-Busch and the industry has slowed in the second half of this year, improving revenue per barrel and cost of goods sold results have contributed to an acceleration in domestic beer profit growth," said W. Randolph Baker, vice president and chief financial officer of St. Louis-based A-B.

    The company's 2007 pricing plan is being implemented, whereby most of the price increases will take place in early 2007. Revenue per barrel will increase in 2007 compared to 2006, the company estimated. Costs of goods sold per barrel will be less than what was seen in 2006, due to lower energy costs.

    During the discussion, Baker noted the company's involvement in the international beer segment -- in particular, its 50 percent ownership in Grupo Modelo, which provides A-B with earnings in the Mexican beer business and import market. Modelo's import business is led by the company's Corona brand, while its export business has been enhanced by a decade-long joint venture with Constellation.

    In other areas, the company is building up its business in China. "With our wholly-owned Budweiser and Harbin operations, plus our strategic partnership with Tsingtao, Anheuser-Busch is very well positioned to capitalize on the substantial long-term growth opportunities in the Chinese beer market," said Baker.

    Baker also reaffirmed the company's performance for fiscal 2006, except for its international beer profits, which will be down due to unfavorable revenue mix in the U.K. The company also restated its long-term earnings per share growth between 7 and 10 percent.

    "Enhancing volume growth will continue to be a major focus next year and we have a number of marketing initiatives, supported by increased marketing spending, to grow our trademark brands and increase our participation in the high-end segment," Baker told the investors.

    • About

    Related Content

    Related Content